PIA - A History: Trying to Turn it Around (1995-1996)

By 1995, it was clear that PIA's passenger business was in recession.

One would expect a downward trend during an economic recession, but at this time both the local and national economy were booming. High fares, loss of major carriers and the false perception created by the local media that PIA had lost all jet service were primary contributors to the decline. Understanding the times is vital. Let's start with a rundown of local air service happenings in 1995 and 1996.

AMERICAN EAGLE (Flagship Airlines/Simmons Airlines)
When a sufficient number of Flagship Airlines Saab 340 turboprops were made available and their crews finished training for winter weather operations, Chicago-O'Hare service resumed Janauary 4, 1995. Initially, there were six daily roundtrips. The FAA's December 9, 1994 order to ground ATR-42s apparently ended permanently the Peoria-Burlington (Iowa) tag-on that was operated daily for several years.

Simmons returned its ATR-42 fleet to five of six Chicago-O'Hare roundtrips beginning January 15. By September 1995, American Eagle had reduced service to five daily roundtrips, with one still operated with a Flagship Saab 340. Passenger numbers must have improved by late-June 1996 when the airline announced the resumption of a sixth roundtrip, using an ATR-42, on August 1 that year.

In early January, American Airlines announced that it would reduce hub operations at the Tennessee capital. Flagship Airlines' Nashville flights ended June 15, 1995 as part of systemwide downsizing. The loss of connections required commuter feeder service to be cut as well. American ended hub operations at Nashville in 1996.

NORTHWEST AIRLINK (Express Airlines I)
Weekday service to Minneapolis/St. Paul held steady at four roundtrips through 1995 and 1996. September 1995 schedules show that Saab 340 and Jetstream 31 equipment flew two each.

TRANS WORLD EXPRESS (Trans States Airlines)
Also affected by the FAA order grounding ATR-42s in colder climates, Trans World Express resumed ATR-42/72 operations to PIA on January 15, 1995.

TWA timetables issued through 1995-1996 consistently show ten weekday roundtrips between Peoria and St. Louis. Generally, two or three of these were operated with 68-seat ATR-72s, one with a 30-seat Jestream 41 (until October 1995) and the rest on 48-seat ATR-42s. Summer 1996 schedules show as many as four roundtrips were operated by ATR-72s.

Airport officials never gave up hope that it could persuade Trans World Airlines to return jet service to Peoria. But financial problems persisted and the carrier entered its second bankruptcy on June 30, 1995. The pre-packaged plan forgave $500 million in outstanding debt. Ironically, the carrier posted a $5.2 million profit in the second quarter that year. A bankruptcy court approved TWA's reorganization and it emerged from insolvency on August 24, 1995. A third quarter loss was $82 million, though mostly from bankruptcy charges. Interestingly, the airline introduced a new red, white. blue and gold paint scheme on a DC-9-30 at the Kansas City maintenance facility on September 28.

Weekday capacity offered by TW Express exceeded 500 seats in each direction, which was more than sufficient to support jet service. Proximity to St. Louis was TWA's excuse for refusing jet service here, but the real reason was the lack of a competitive reason to do so.

UNITED AIR LINES/UNITED EXPRESS (Air Wisconsin/United Feeder Service)
United Air Lines' last flight at Peoria took place on February 7, 1995. Operating the early afternoon Denver-Peoria-Moline-Denver itinerary was a Boeing 737-300 (the 727-200s had already been shifted to other routes). That evening, an Air Wisconsin dba United Express BAe-146 arrived from Denver (via Moline) to inaugurate replacement service. A full schedule began the next day.

United Feeder Service maintained four daily roundtrips between Peoria and Chicago-O'Hare on 64-seat BAe ATPs.

C-130'S FOR THE 182ND AIR NATIONAL GUARD
The 182nd Fighter Group gave up its F-16 Fighting Falcons to the United States Air Force in October 1994. Subsequently, eight C-130E Hercules transports were deployed here as replacements, two in January 1995 and the other six that spring. The change in mission led to the group being renamed the 182nd Airlift Wing. These aircraft required larger hangar facilities, and $5.2 million for the project was budgeted for the 1995-1996 fiscal year.

REGIONAL AIRPORT MAN/MARKETING HELP
PIA understandably became extremely image-conscious after losing its last major carrier. As already stated, there is usually a correllation between a good economy and good air service. The local economy was good in 1995 but the legacy airline industry was still tightening its belt due to competition from Low Cost Carriers (LLCs), many of them recent upstarts. This began a trend in which smaller airports began offering incentives (waived landing fees, deferred terminal rental, etc.) or outright subsidies to lure new carriers or even maintain existing service.

Unfortunately, some advocates for better airline service promoted fantasies as a solution to declining airline service. On March 30, 1995 Bob Corrigan asked the Tazewell County Board for a feasibility study to build a major airport near Hopedale, located in the southeastern quadrant of the county. Corrigan estimated a facility with a 15-gate terminal would handle 2 million passengers a year, offer service to 27 cities and cost $500 million.

Corrigan's proposal lacked credibility for many reasons, mainly because other Central Illinois communities were unlikely to agree to support construction of a new regional airport in such proximity to Peoria, forcing closure of their own facilities. Central Illinois' population was also too widespread to be served by a single regional airport.

Tazewell County may have been icy toward Corrigan's proposal, but area officials knew something needed to be done to reverse the decline in service and passenger traffic at the Greater Peoria Regional Airport. LCCs were forcing massive fare reductions at Chicago, Indianapolis and St. Louis, to which PIA "leaked" passengers. Traffic was down 12 percent the first seven months of 1995. In August, the airport authority hired Minneapolis-based Kiehl Hendrickson Group to study travelers' ticket-buying patterns and provide expertise on airline industry trends.

In September, it was revealed airport officials were looking for new carriers. The source article is plagued with confusion, but it appears the airport authority was working to get

- TWA jet service to St. Louis (possible after March 1, 1996).
- ComAir dba Delta Connection regional jet service to Delta's Cincinnati hub.
- Desert Sun Airlines dba America West Express to Phoenix.

Kiehl Hendrickson recommended that PIA pursue LCCs to bring lower fares and stimulate traffic. Examples given were Mesa, Desert Sun, AirTran, Valujet and Kiwi International Airlines. The airport wanted to lure new jet service by Fall 1996.

A March 6, 1996 PJStar story detailed possible incentives including waiving jet landing fees, providing free free hotel and meal accommodations for crews, free interior cleaning services and free advertising. The same article offered the first clue that PIA was holding talks with Atlanta-based Valujet Airlines.

At the time, Valujet served only a few smaller cities (Jackson, MS and Savannah, GA), but its seems Peoria could have easily supported three daily roundtrips to a growing Atlanta LCC hub. Unfortunately, Valujet's poor safety record became national news May 11, 1996 when a DC-9-30 operating as Atlanta-bound Flight #592 for that carrier crashed into the Everglades shortly after departure from Miami. Investigators determined that improperly stored chemical oxygen generators caught fire, eventually destroying control cables, causing the crash which killed all 105 passengers and five crew onboard.

Amazingly, several days after the Everglades crash, local airport and business officials had not dropped Valujet from a list of carriers to pursue with incentives in return for offering jet service. Subsequent events did the job, however. The Federal Aviation Administration grounded the airline June 16 and allowed it resume flying September 30. Valujet never recovered, and would eventually disappear through merger with another upstart LCC.

A study of Illinois Airports paid for by the state and conducted in spring and summer 1996 by Michael Boyd's Aviation Systems Research Corp. started with Peoria. A June 4 article contained this:

During a presentation Monday at a Greater Peoria Airport Authority meeting, company President Michael Boyd told airport officials that Peoria has "excellent air service, which we already knew," Carter said.

Note the contradiction? Air service levels and passenger traffic were flat in both 1995 and 1996. If Peoria had excellent air service, then why the 1995 marketing study? Boyd even suggested new jet service could be obtained via Continental Airlines to its Cleveland hub, something PIA officials hadn't previously considered!

Peoria failed to obtain new jet service by fall 1996 but nearby Bloomington-Normal soon acquired two new carriers offering mainline jet aircraft. By early 1997, newly-renamed "Central Illinois Regional Airport" boasted daily service to both Orlando and Denver (via Omaha). It took a long time for PIA to figure out what happened. (Look for more coverage in the next post of this series.)

AIR CARGO/INTEREST BY DHL
PIA air cargo volume actually dropped a bit in 1995 when 37,298,489 pounds were handled by Airborne Express, DHL Worldwide Express, Emery Worldwide and Federal Express.

I don't remember when DHL began flying out of PIA, but it was probably after the new cargo terminal opened on the airfield's southeast quadrant in May 1993. The carrier offered five-days-a-week service on a Cincinnati-Peoria-Moline routing using a Fairchild Metro.

DHL established its Cincinnati hub in 1983, but by 1996 had run out of room. In November that year, it was revealed PIA had made the cut to become one of six finalists for DHL's new $150 million midwest sorting center. If selected, PIA would gain a 750,000 sq. ft. cargo terminal and 1,000 jobs. More on that in the next post of this series.

PIA cargo volume in 1995 was 37,298,489 million pounds, a 2.8 percent drop from 1994. A July 20, 1997 PJStar story indicates that cargo volume was 41,639,244 pounds in 1996.

NEWSPAPER SILLY SEASON
This one must be short and sour...

Paul Gordon's December 6, 1994 Business File column confirmed for us that Air Wisconsin BAe-146 jets would replace United Air Lines mainline jets to Denver on February 8, 1995. An article published on that date, written by one known for sloppiness, correctly stated United's withdrawal did not mean the loss of jet service. Large ads dated July 30 and August 6 that year told us that Yes, Peoria still has Jet Service! An August 13 ad shows images of planes used by airlines serving PIA, including a BAe-146. Yet, Peoria's newspaper of record commits this abomination not once but twice in stories dated September 23 and 27!

The airport lost passenger jet service in February. United Airlines announced in October 1994 that its jets would no longer use the airport, leaving it only with express airlines.

The two writers bungled more in the September 23, 1995 article:

[Airport Director Bruce] Carter said that is a possibility that Trans World Airlines, though its Trans World Express, could provide jet service at the airport after March 1, 1996.

Carter couldn't have implied TW Express intended to provide jet service here after that date as its provider, Trans States Airlines, had not yet order regional jet aircraft. I suspect the writers were simply confused.

Another failure by Peoria's newspaper of record was lack of reporting on American Eagle's decision to drop its Peoria-Nashville route June 15, 1995. This would not be the last of its bungling.

MISCELLANEOUS ITEMS
An Antonov AN-124 belonging to Volga-Dnepr Airlines, LLC landed at PIA March 27, 1995 to load three Caterpillar D8N track-type tractors bound for Vitimsky Mine in eastern Russia. USAF C-5s had visited PIA for years, but the AN-124 can carry more cargo and is slightly bigger. The big jet departed the next night. Extension of Runway 13-31 from 8,000 to 10,000 feet in 1993 enabled its visit. There would be several more by this plane.

In April 1995, the Greater Peoria Regional Airport was selected for two federal projects which created 900 jobs. A Federal Reserve of Chicago placed a check processing center in the main terminal, and the United States Postal Service also tapped the airport for a remote encoding facility in a new building west of the terminal. These new tenants intended to employ 75 and 837 workers, respectively.

On November 3, 1995 PIA dedicated an Instrument Landing System (ILS) for Runway 4-22. The $1.76 million system created an electronic highway in the sky for pilots when on final approach. The new system was also expected to reduce weather delays. Previously, ILS was only available for Runway 13-31, which was scheduled for closing in Spring 1996 for resurfacing.

In January 1996, the airport board approved  construction of ten new T-hangars for private planes. In addition, 47 existing t-hangars were refurbished (bonds totaling $1.5 million included work at Mount Hawley Airport).

Per a March 5, 1996 article, the 1997 Federal budget included $4.2 million for a new hangar needed to accommodate the 182nd's C-130s. Construction needed to accommodate these transports began in July 1995 and projects would span several years. The new hangar would start in 1998 and be finished after 18 months.

On March 6, 1996 icy conditions caused the right landing gear of an Emery Worldwide DC-8 freighter to slide partially onto a grass border and stick in the wet ground just after landing here around 5:00am. The plane was stuck through the afternoon, but did not disrupt other operations.

Airport director Bruce Carter testified before the U. S. House Aviation Subcommittee March 13, 1996 that declining federal funds for small airports like PIA threatened growth. Lack of funds for taxiway rehabilitation as well as new rescue and firefighting equipment would force increased landing fees which threatened to deter new service and possibly cause service to decline.

In early June 1996, PIA obtained $5 million in grants for yet another relocation of Smithville Road and rehabilitation of Runway 4-22.

SCHEDULES, ROUTE MAP
After losing Nashville flights in June 1995, PIA's air service settled on regularly scheduled service to just four hubs on four carriers - American Eagle (five to Chicago-O'Hare), Northwest Airlink (four to Minneapolis/St. Paul), Trans World Express (ten to St. Louis) and United Express (four to Chicago-O'Hare, two to Denver, most via Moline) - totalling 26 weekday departures. Passenger traffic was flat in both 1995 (363,167) and 1996 (363,483) thanks to declining service, high local fares, leakage to low fare markets and a poor public perception. I've used individual airline timetables and a September 1995 Official Airline Guide to create a PIA schedule and route map for August 1995.





- David P. Jordan

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